United States Cuba Policy & Business Blog

Thursday, January 21, 2010

United States Cuba Relations – The Terror Designation Telecom Conundrum

We have been reporting on the blog the problem why the terror designation on Cuba has many consequences, including the high cost of telephone calls to Cuba and why President Obama’s initiatives to expand telecom to Cuba will not progress until the terror designation is lifted. A recent news development illustrates the problem.
Just recently it was reported on the Yahoo Cuba News group, cubanews@yahoogroups.com, that a Cuban exile named Nilo Jerez obtained a default judgment against the government of Cuba in the amount of $50 million in 2005 for injuries alleged due to mistreatment in the 1970’s. Mr. Jerez, by his attorneys, the law firm of Patton Boggs, is seeking to collect on the judgment, most recently by serving an information subpoena on the U.S communist party, which they believe is allied or connected with the Cuban government!
Two important things to consider, the fact that Cuba is on the list of state sponsors of terror triggers another important law, the Terrorism Risk Insurance Act. It is that law that does two things – strips a country of sovereign immunity to private lawsuits in the United States and allows plaintiffs to collect on any assets held or owed to countries on the list, if those assets are in the United States. This is how Mr. Jerez successfully sued the Cuban government and why he is looking for any Cuban assets he can collect upon that are in the U.S. It is also a root explanation of why any potential telecom business with Cuba will not succeed. As long as Cuba cannot safely collect any long distance or telecom fees it may be owed in the course of an OFAC licensed telecom transaction with a U.S. company, there is no incentive for the Cubans to engage in those transactions. If a U.S. company owed the Cuban telephone company any monies for telecom services, those monies could be attached or seized in a judgment collection while Cuba remains on the list. The telecom industry cannot ignore the detrimental impact this designation has. It effectively denies both U.S. businesses and the Cuban telephone company the opportunity to take advantage of the natural long distance market that exists between both countries and the millions in revenue and jobs that would be created were there to be normal telecommunications. In addition, it helps create the conditions that give us the status quo of Cuba being one of the most expensive places to call from the United States. For those with families and friends in Cuba, their human rights are being violated by another insidious economic wall foisted by our misguided policy with Cuba. Right now there are Cuban Americans and Americans who want to call friends and family in Cuba but simply cannot afford to do it on a regular, normal basis.
This is not the kind of results we want to see from our foreign policy nor the kind of change leadership President Obama ran upon when he was elected. President Obama has the power to lift this misguided designation on Cuba. We say we want more communication with the Cuban people? When will there be an objective review of this failed policy by the President? Mr. President, if you want to create jobs and particularly create them in Florida – lift this terror designation and support congressional efforts to lift the travel ban on all Americans to Cuba.


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